Cablevision 2Q profit drops 27 percent

Cablevision Systems Corp. reported second quarter net income tumbled to $63.8 million from $88.1 million a year ago, despite a 0.5 percent increase in revenue to $1.697 billion as the company added customers.

The Bethpage-based firm’s earnings were lower than the prior year ago, at least in part due to its spin off of AMC Networks, including AMC, IFC, WE tv, the Sundance Channel; the IFC Center in New York City and IFC Films.

Last year, Cablevision earned $18.6 million from AMC Networks in the second quarter.

“Our second quarter financial performance reflects the near-term impact of the operating and capital investments that we’re in the process of making,” CEO James Dolan said in a conference call.

Cable television revenue increased 0.7 percent to $1.516 billion due to 25,000 additional high-speed data and 23,000 voice customers. But telecom operating income decreased 14.9 percent to $317.7 million, due to higher operating expenses, primarily due to programming costs.

Cablevision’s advertising revenue at Newsday and revenue at Clearview Cinemas both declined, but the company said those were “more than offset by lower corporate costs.”

James L. Dolan said the firm is continuing to expand its Wi-Fi network, enhance Optimum Online and provide more mobile and HD television video offerings.

“These actions are generating a positive response as evidenced by the 24,000 net new customers we have added during the first half,” Dolan said. “Our focus on transforming the way we operate has never been stronger.”

Even as the firm won over more customers, Cablevision took a financial hit in the quarter due to a $16.2 million loss on derivative contracts, up from a $2.8 million loss a year ago.

But the firm also took a $29 million gain on investments, more than offsetting the loss on derivatives.